When you look at the bitcoin cash/bitcoin pair chat on a weekly timeframe (screenshot above), in a technical way you will find this pair is facing the challenge of breaking a supply zone area or another call area of resistance.
Maybe you have been heard about the word supply zone but you don’t understand what is this, in short, the supply zone is the area where many seller areas placing their limit orders. There are two popular types of supply zone which are categorised base on pattern formation;
- Down base down supply zone.
This type forming when price drop for a while and make a consolidation or ranging then continue to fall. Where that consolidation we call it base. - Rally base down supply zone.
This type of supply zone happens when the price moves up and consolidate/ranging for a while and then change direction by starting to fall.
On the screenshot above, the supply zone that formed in bitcoin cash/ bitcoin is drown base down. Most of the technical short term investors use this zone for placing their selling limits orders, profits and others waiting for this zone to break and candlestick close above to continue to buy.
What is my prediction on bitcoin cash/bitcoin?
Technically, when two or three reversal candlestick pattern like pin bars or doji and engulfing will formed around that area there is a high probability for price to reversal. But if the next weekly candlestick breaks that supply area, most buyers will continue to hold their buying trades and others will add more buying orders.
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